BlockApps tokenizes real-world assets on blockchain

0:01I'm Ashen Addison from the cryptocoin show and today on blockchain interviews with Victor Wong founder and chief product officer of block apps Victor thanks for taking the time and great to see you here today oh thank you Ashton thanks for having me you're very welcome excited to dive into the real world asset space in blockchain uh and what you and the team at block apps have been

0:21building I know you've been in the space for a long time I would love to hear a little bit more first of all about your background in business and blockchain and how that led up to block apps and then we can dive into all the latest information okay great um well I guess um I've been a long time participant in the space um I helped with the launch of

0:40the ethereum public blockchain and then from there we really focused on um Real World Adoption of blockchain by primarily focusing on private blockchains and Enterprise adoption so we built many of the first um you know blockchain applications used by Enterprises using ethereum technology and over time uh we we we created a fairly large business growing and

1:08working with those Enterprises but you know in in sort of the more recent times we realized that we think the real adoption mainstream adoption of blockchain is not going to come primarily through private blockchains but really through um public blockchains and because Enterprises are now getting comfortable with you know putting some of their workloads on public blockchains

1:34um the example is the announcement by black rock this week so we we saw that Trend over a year ago and we made that kind of pivot toward the rwa space yeah it's very interesting and it's amazing to be at the Inception of of ethereum and see and be actually helping build out that mainstream adoption it's interesting to see that transition from uh major companies they want to get

2:00involved with this but in the way that they do it you know private ethereum blockchains are are not the ethereum that we see on on coin market cap um they they're using the technology U but it was just a matter of time before they get comfortable uh with something that you know eventually will likely be a multi- trillion dollar or more uh Market um Alone um and the real with asset

2:25space is one of the major use cases for ethereum of course there's so many um but I know know that I feel like it's one that is yet it's it's on the cusp of that hockey stick effect you know we we've heard of obviously the finance industry uh which will also be tokenized into into real world assets but other things that you wouldn't normally think of of being tokenized uh are now like

2:50people are getting comfortable with ethereum technology to be like hey we should tokenize all this other stuff because there's incredible benefits there as well yeah and and that's so what what we saw is like really you know at at block apps and and this kind transitions into what we're doing at block apps when we made the tradition we when we made the

3:08transition away from the Enterprise private blockchain Market um you know what what we were doing in that market for Fortune 500 companies governments you know all of these big clients was really we were taking real world assets and tokenizing them mostly for like supply chain use cases so we started off with basic etherum but how all these features in order to make it work for

3:33these kind of use cases and you know some of those things include identity changes to the consensus algorithm how to model them in smart contracts so that's some of the work that we had kind previously did and what we saw is that as kind of these companies and kind of started to move toward the public blockchain space but also as the kind of mainstream adoption kind of petered off

3:58a bit and we we see you know at block apps we say our mission is to on board the next 1 billion blockchain users by offering the rare and valuable things what what we mean by that is you know like it has to be something that someone would buy whether or not blockchain was involved or not and you use the blockchain aspects to make it more enticing to them by either giving them

4:22lower cost by fractionalizing or you know making it more available for like secondary market trading so that that's really what we're focused and to do that we've kind of launched our own ethereum derived blockchain with these extra features that we call Strat Mera oh very interesting I'd love to dive into that a little bit uh later as well and um great

4:44insights into the rwa space I I know that eventually you know the entire stock market and hopefully every car and every building will be tokenized it's just a matter of which are the assets that are ready and the people are ready to understand and buy those assets first as all the entire world of assets gets transitioned into blockchain what do you think are some of the ripe areas in what

5:11types of assets are most fit to become the early adopters of tokenization for people to buy and trade right so I mean you have where things started you know the earliest rwas are stable coins right and you know really what we think about it is that it's it's things that people can understand and also want access to so part of our thesis is that we want to

5:36kind of there there are whole classes of assets that we want to democratize that currently normal people don't have access to like you know for example um just as an example most of these are like high value assets let's say you had the money and you wanted to buy you know a high-end piece of art or commercial real estate now you probably wouldn't necessarily know exactly where to go to

6:02do this and that's assuming you have the money most people don't have the money so how can we bring it down um to make it available to most people and you know that's where we're using the blockchain ability to fractionalize and drisk it by allowing people to you know sell it when they want to um as kind of like the benefit so we sort of lead with the

6:22assets and classes of assets that we've seen already are are like think of anything that the wealthy have access to to their portfolios that most normal people don't have so I mentioned a couple there you know art we've looked at but um you know that's not our main focus Meadows is another um you know commercial real estate for example um there are so many Collectibles we've

6:47started with like there are so many of these sort of areas that we're kind of looking into now and you know pretty much from everyone we talked to they're really interested in kind of moving in this direction mhm it's very cool and I love that as more people are interested in investing in different types of assets for the example that you gave about you know art or real estate

7:10you know 99% of the world can't go buy a skyscraper all out you know they want to get 1% or 0.1% of it and I think that's where tokenization really comes into play lowering the barriers for entry um but I think even middle medium priced or lower priced assets there still are a lot of benefits for tokenization or just the liquidity the transparency and being

7:34able to move something or Own It digitally and buy it from somebody across the world uh without having to you know go through all the logistics of of figuring out how you're going to move this precious piece of art you know mo most people that are investing in something they don't necessarily have to have it in their possession to own it if they own it on the

7:54blockchain yeah I I think that's the core piece of the blockchain that most people don't talk about I think the core function in terms of real world assets of blockchains is really to separate ownership from possession right so you don't necessarily need to own something in order to re the benefits of trading or you know reselling it and we've seen this kind of happen on an industry level

8:20already like you know you can think of Commodities future markets they already do this um you can think of you know in the sneaker Market they already do this where there are consign vendors that hold the actual item and then you can retrade those items without having the friction of having to ship it every time so you know we're taking that and kind

8:40of generalizing it our ultimate vision is to be able to kind of take any tradable real world asset put it on the blockchain and be able to kind of reap these benefits of like the whole having a tradable digital entity because it can move very fast can be more reliable and like like we said it can can kind of allow you to lower the costs of having a partial ownership without having to buy

9:05the whole thing mhm and I was looking into the block apps Marketplace some of the different types of real world assets that the team is starting with saw carbon in their metal metals and and collectibles I'm curious on the metal side I feel like personally it's a great you know diversification to have some kind of metals in your portfolio as well can you talk about the difference of

9:29people that have been traditionally buying metals or even digitally buying them from somebody versus on the tokenization marketplace yeah so really it's about you know kind of like um when you buy any kind of token um we basically allow you to kind of resell it right away right so which makes it much more easy like part of the part of the issue with

9:55things like Metals say they can be very heavy and bulky to ship in volumes you don't want to move around even a th000 ounces of silver is a you know close to 80 pounds like it's a big bar and the shipping costs alone are enormous I mean people complain about gas costs like if you just think about the shipping cost of something like that it's crazy right so like but

10:17how can you kind of adopt to a world where you can trade in something without having to have the physical thing first of all you have to have trust that the physical thing is being held and is real right so in our world and and the way we kind of design TR marata is we have this idea of issuers like issuers are people that um have been verified and are

10:43holding that physical thing so for example the meows we sawell in marata today we work with a partner tokeny and for every ounce of silver you are buying effectively shares in 100 oun bars which are kept in a vault so you know it it's we taken that idea from the stable coin world where like asset backed stable coins you know and black rock is doing this with financial instruments and

11:07applying it to real things and we think that is where you know as these kind of individual items move um people will be able to leverage the profits off it without having to buy the whole thing and that that's what we kind really really interested in no it's very interesting and I'm curious for traditional investors that they invest in the stock market they maybe not are

11:32familiar with the intricacies of blockchain or the tokenization part what is the major difference between you know going to the Commodities exchange or on the stock market and purchasing something that they think is as close as they can get to Silver versus yeah buying it on the tokenization market yeah I mean the the big answer to that question is you know when you're is

11:54control right and what what we mean by this is that when you buy um it you can definitely buy you know uh ETFs of various items like this like it could be real estate could be art it could be any of these categories right but you're still missing the underlying control of what you're buying right like you don't make the decisions I I want to buy this

12:17building and not this building right I want to buy this kind of metal or this R piece and not this R piece right and you know what we're offering is the ability to buy um effectively asset tokens so you buy you know a component of that asset itself and it's up to you if you want to group them into a fund that's fine with you that's fine with us if you want to you know but like

12:42you know kind of more clearly what you're buying versus sort of that fund kind of portfolio thing and you know we see that people will eventually build portfolios themselves once they're kind of given that aspect of it but they want more Choice over the things to buy like you know where you buy uh real estate even in one city or one District can be very different so you

13:05know why should experts take that money and then the next part is management fees right those experts charge a lot of money to do that whereas you know our fees are like effectively they're transparent right we don't we don't charge those kind of ongoing fees generally for sure yeah that's definitely one part of the traditional markets is it's you know blockchain

13:26you're lowering the fees not just on the transaction costs but just like holding your own assets and being able to understand uh how much something cost um I there's a lot of benefit that I think traditional investors have yet to realize or see those benefits because they need to get into it deeper I feel like maybe 2024 is the year that we see an explosion in real world assets moving

13:49into the portfolios of not just crypto lovers but traditional investors as well and we saw the huge news this week with black rock and other entities moving into real world asset space can you talk about that news maybe elaborate and and what that could mean for tokenization being adopted yeah so I think what you know like that to us is sort of like the

14:14icing on the cake of a trend that we've been seeing over a long time so you know when we started as as I said with private blockchains and this kind of thing what we saw that companies wanted to tokenize was like real items whe whether to track it and move it and you know that's something that's really important for them right so a lot of the things we did like we tracked

14:35agricultural products we tracked you know oil and Energy Products we tracked all these kind of like um mining kind of uh not like crypto mining but like physical mining um you know resources kind of thing and we saw that there's a huge amount of value when you digitize something and understand the kind of ownership understand where it came from right and now I think

15:00people are kind of catching on to the thing is that that doesn't have to only be used by large companies it can be used by individuals to make their buying decisions and I think this is you know why black rock is moving into that right like they're seeing that for financial instruments this is something that's important right we've already seen like

15:20I said this happen in like the commodity spaces and other areas but this is giving us an opportunity to move sort of illiquid assets into this and there so many illiquid Assets in the world like the majority of assets are illiquid right if you think about things like the stock market that's just a small part of what is available in the entire world that we could potentially tokenize and I

15:43think black rock is waking up to that too yeah no it's incredible the the opportunities are sort of endless you know even just personal items everything you own could be tokenized and then there'll be a a stock market tokenized ation market for that so to say which will be crazy and I think people will look back at the stock market and see uh they'll realized that

16:08it was crazy to see how inefficient and slow and higher cost it was than when blockchains you know adop adoptions sort becomes mainstream maybe it takes a few years or five or a decade um or a few decades to get everything on um but I feel like it starts slow and then it moves up a lot quicker and you know to discussion around tokenization especially of real estate and metals and

16:32commodities has been around but it's just lowering the other barriers to entry whether it's understanding blockchain technology or the user experience or actually getting the old world transition to the new world there's all these barriers so do you think that that is you know is is there it's hard to put a time frame on it but is there a time frame in when we start

16:56seeing Capital more Capital than before moving into the space yeah so I I really think I mean being around as long as I have you you see these waves right so you saw the launch of ethereum and then you know um it held steady for a really long time and then you had the Ico Boo and then you know another crypto winter then you saw the nft boo right and then another

17:22crypto winter and then so what I think is driving the kind of activity now is really the kind of realization that blockchain can be used for things that are effectively asset back tokens right people you know the the one question when I talk to non- crypto natives about tokens they always say well what am I actually buying like what's behind this thing right and unfortunately you know

17:51like I I definitely understood blockchain as well as anyone but like you know at the end of the day I have to say well it's Network computational Power or math or some answer like that and that's not a satisfying answer to most people so I think ultimately what needs to happen and what companies like ourselves and what companies like Black Rock are really

18:10saying is that what we need to do is find things that people want to buy regardless of whether they're on the blockchain or not right that and if we can do that if we can make that then you know we don't have to lead with blockchain we can have go for and I really think we're moving into the next era of what I would call the rwa era right like all of these things

18:35are kind of moving in this direction and they're going to be asset back stable coins of all kinds of stripes and varieties it's a great explanation Victor and yeah when I also try to explain blockchain because it's a new asset class and it can't really be defined uh from traditional economic explanations it's it's hard to explain because you can't just go back to an old

18:58text and read that it's something that's completely new um and I like what you said there about buying an asset that's on the blockchain as long as they don't have to understand the blockchain and they don't know they don't need to know the underlying technology I feel like because it's more novel people they get interested but then it gets confusing and then they're

19:20like ah whatever but traditional applications or even on your banking application people don't care what's the underlying technology they don't need to know you know what was the coding language that made their banking app safe um they just they just trust it they just use it because it's been around and I feel like it's going to take some time for that and you know

19:38like that's one of the ironies of the blockchain space I mean I'm I'm a technologist you know I I've started mqu tech companies and like I I think one of the things is that one of the things that attracted to us to this industry is that it's about you know that blockchain could provide better security and Trust than other Technologies available but you know to the most of the regular

20:04world blockchains have been synonymous with fraud and scams so there's kind this kind of Disconnect and you use the banking example that I think that banking example is perfectly right you don't think about the database that the bank uses you know you don't think about for example the transaction fees that Amazon charges you right like you don't think about these things what you think

20:25about is can I like are they offering me something that I can get access to and and can I trust that they actually have that thing MH and you know like I think that's something that we haven't been focused on in the blockchain space enough and that's really why we we kind of took it upon ourselves to kind of focus really on that problem yeah it's a great focus and

20:50Victor if I went to the marketplace for block ops and maybe can just explain you know as we've sort of danced around it I want to go there and I don't want to have to learn about blockchain I'm personally curious on on how it works but understanding the user experience in making it as easy as possible or similar to what they've known in the past to be

21:12able to buy metals and understand the benefits of tokenization without having to go through a blockchain oneon-one course how would I go to the marketplace and get that done fast and easy yeah so and and to be clear like you know for example tomorrow we're launch ing um you know carbon neutral silver that's go both going to be on the public ethereum

21:33blockchain and our Marketplace so you know we provide interfaces for both right but on you know like we think that the experience on ethereum and level twoos for dgs have improved dramatically so people know how to use metamask buy something and you can do that with the assets we're offering too you know starting tomorrow our first of that kind of asset classes know we're sell the

21:57carbon neutr silver token um and that's going to be available you can buy it directly on the public of theg now what the marketplace was meant to do was really provide that what I would call Web 2.5 experience for non-blockchain users right so like think about okay how do I create an identity how do I pay can I pay in a credit card how do I you know

22:20under the hood work you know everything you buy is effectively a Tok we're tokenizing it that's all there and all the technology is there but we kind of want to hide that on the marketplace so that's we want to make it very very easy for that kind of normal user to kind of be able to buy and look at what they own and that kind of stuff and that entire

22:41process is evolving too but you know that that's really what we focus on create an identity buy with a credit card be able to see what I own with that identity um you know and in manyways it looks almost like a normal website but under the hood it's all you know blockchain derived Tech techology yeah it's really cool it's a normal website but it's actually powered by the

23:03technology of the future that right exactly and as people get more comfortable we're moving more and you know we kind of want to move them more and more in a block chainy direction right so we're going to make it feel you know even in our next release coming up it's going to feel more like an nft Marketplace like but PE you know the the average user we're going after which is

23:24sort of the more late more like early mainstream kind of user really you know like it's still too overwhelming for a lot of people and if we're going to reach our goal of getting more people on the blockchain and kind of bringing more of the mainstream we have to kind of meet them where they are today no I I know that there are millions of new people that are

23:46getting crypto wallets and getting familiar with it but it's also great to have that web 2.5 experience and sometimes you just want to use your credit card or just you know build a web through ID so um exactly exctly you know like and like we want to be able to kind of use all the benefit of crypto but you know make it easier and it's funny CU When I started all the problems that we

24:10were talking about were really technology problems right like we had to solve scalability we had to you know solve start to create standards like and a lot of those poor technical problems are resolved now or you know there are huge amounts of people working on them which is great but you know getting that normal person interested in you know I I I love all the develop technical

24:38developments you know the works that are being done on zero knowledge proofs The Works being done on you know scaling and layer twos and now layer 3es all of that is super exciting to me personally but you know for my non- crypto friends I have to have something for them that will get them interested and what really gets them interested is like hey have

24:59you ever thought about buying this really interesting thing like silver or you know some metal you never thought of and would you like to and a lot of the times they were like yes and so blockchain to them is just a means to an end well said Victor and if people want to learn more about wew assets or how block apps is tokenizing them or try out the marketplace by the carbon neutral

25:24silver that's that's coming out and and follow along for as more types of assets get tokenized is there a best place to go to to learn that or to get started yeah um you know uh they can come to our website uh block apps.net um they can follow us on Twitter at block apps and if you're particularly interested in buying you know the public ethereum um carbon neutral silver you

25:48can go to CNS block apps.net very cool I can leave those links in the show notes below as well appreciate your insights Victor into real world assets with this news this week with black rock I feel like we're on the CP of something huge and more people are going to be looking for different rwa Alternatives and I feel like this is something that's coming at

26:09the perfect time so thank you so much for coming on today and all the best with blocks moving forward thank you Ashton it's been great talking to you